AUSTIN (KXAN) — Austin-based tech giant Oracle is laying off thousands of employees, a move first reported by CNBC that raises questions about the future of the city’s tech-driven economy.
Although the company did not disclose how many employees in Austin may be affected, Austin economists and experts said that despite the significant changes the technology industry is undergoing, the overall outlook for the region remains positive.
“Austin’s economic trajectory is still in a very good place,” said Kevin Frazier, director of the Artificial Intelligence Innovation and Law Program at the University of Texas School of Law.
However, Fraser acknowledged that the impact of such large employer layoffs cannot be ignored.
“Austin thrives on its tech community, and obviously any time there’s a massive layoff involved in one of our critical tech hubs, it raises some eyebrows and deserves serious consideration,” Frazier said.
According to CNBC, Oracle began issuing layoff notices on Tuesday, affecting thousands of employees across the country. While artificial intelligence is often cited as a driver of the tech industry’s shrinking workforce, Fraser warned against placing the blame solely on AI.
“People should be concerned when they see these headlines, but they shouldn’t rush to say AI is evil,” he said.
Lisa Simon, chief economist at Revelio Labs, said the layoffs reflected a broader strategic shift within the tech industry, which she said was focused on freeing up capital to invest in artificial intelligence infrastructure such as data centers.
Job seekers should pay close attention to how the market evolves, she added.
“This is clearly not a good time to enter the job market,” Simon said. “But if you are, having an AI-related background on your resume is better than nothing.”
Fraser said the situation highlighted the need to focus on preparing workers for new roles, rather than focusing solely on unemployment.
“How do we work with local stakeholders like Austin Community College, how do we work with the city of Austin, how do we work with local employers to say, ‘Hey, if you’re impacted by layoffs at Oracle, we’re here to help you,'” Frazier said. “We’re here to help you find new skills and new opportunities.”
Oracle declined to comment on the number of layoffs that may affect Austin. As of Wednesday, Oracle had not received any WARN notices (required for large-scale layoffs) in Texas.
Despite the uncertainty, Frazier remains confident in Austin’s long-term appeal to tech industry workers.
